CBA wealth management chief operating officer Michael Venter said the changes were in part a response to issues identified during the Hayne royal commission.
“The changes announced today continue the process of reform underway in our wealth management businesses and form part of our response to specific issues identified this year through the royal commission,” he said.
The initiatives for improving outcomes for customers include rebating all grandfathered commissions to Commonwealth Financial Planning customers from January 2019.
This rebate will benefit around 50,000 customer accounts by approximately $20 million annually.
“We support the removal of grandfathered commission from superannuation and investment products across the wider industry and believe a legislative approach should be considered,” said Mr Venter.
The bank has also announced plans to review any advice fees charged to deceased estates across all its advice licensees and refunding with interest any instances where unauthorised fees have been charged.
“Charging unauthorised advice fees to deceased estates is unacceptable. A broader review of deceased estates is underway across our advice licensees. It will go back seven years to ensure that any instances where unauthorised fees have been charged are identified and refunded with interest,” said Mr Venter.
Customers will save approximately $25 million annually with the bank’s plan to remove certain fees on legacy wealth products and all CFP customers will have an option to renew their ongoing service arrangements every two years.
The new initiatives are the latest changes the bank has made after spending $580 million over the past six years to improve its advice business.
Commonwealth Bank has also spent approximately $270 million in compensation to customers who were provided with poor quality advice or charged fees for no service.
I don’t get it. I have a CBA client that pays me 0.3% grandfathered commission ie $45 p.a on his $15,000 super pension. So CBA rebates it back to the client.CBA doesn’t drop the 0.3% MER but keep it for themselves and gives no service , then pays me nothing. So the client gets no service ,pays the same MER , so i dump the client and in the end he is the loser!….. sounds great CBA … not
You shouldnt be servicing a client for $45 per year. Sorry, but if they arent willing to pay real fees for your advice then they shouldnt be a client. Divert your attention to clients that value the service.
No professional provides a comprehensive service for $45 per annum.
CBA, you still OK paying commissions on Mortgages/Investment loans to brokers?
This week. Yes.
Couldn’t CBA continue to pay the grandfathered commissions and rebate the MER?
An extremely fair point, except if you’re a Banker.
Hey CBA, have you ever heard of Fees for Service or Commissions for Service ?
Just think if you actually provided the services you said you would provide and charged for then all this RC purging would be unnecessary.
Read the LinkedIn CV for M Venter, CBA Wealth and you tell me if you think he should be the COO of a Wealth Business. Advice experience? Superannuation or Financial Planning qualifications?
Maybe he passed the Banks physcometric exam !!!